4. Ethical Investment Policy

Why measure this?

A strong ethical investment policy ensures an institution’s investments and banking practices are conducted transparently and in an economically-viable, socially-responsible manner, not blind to wider social, environmental and humanitarian concerns. Ethical investment policies are not only necessary to direct decision-making around the investment of ‘extraneous funds’. They inform decisions about all areas of investment conducted by an institution, including but not limited to pension fund investments, equities investment and an institution’s choice of banking providers.

If an ethical investment policy isn’t put into practice then it is not worth the paper it’s printed on. The People & Planet Green League only awards full points if there is a clear process for regular review of the ethical investment policy, with ongoing opportunities for staff, students and other stakeholders to engage with the policy and if there is clear evidence that the policy has been acted upon within the last year.

How are points allocated?

Total: 3 points

Institution has a publicly-available ethical investment policy. 1 Point

Institution has a publicly available ethical investment policy which is reported on annually and/or there are ongoing opportunities for staff, students and other stakeholders to engage with the policy. 1 Point

Institution has, on ethical grounds: a) divested, b) invested, c) engaged with companies as a shareholder, or d) changed banking provider. 1 Point

How is this criteria assessed?

4a) Does the institution have a publicly available ethical investment policy?

1 Point

Clarifications:

• An ethical investment policy should be comprehensive, so simply stating that no investments will be made in one particular industry (e.g tobacco industry) does not qualify.
• No points awarded for institutions that include only limited statements within an existing investment Policy.
• No points for simply stating that the university has no funds to invest therefore doesn’t require an ethical investment policy. Such policies are necessary in considering the environmental and ethical implications of a range of financial decisions, for example, selection of banking providers.
• We do not agree with ALL definitions of ethical investment – sustainable procurement (e.g buying products and services) does not count.
• No points awarded for policies that do not commit an institution to going beyond financial incentives (i.e. only investing ethically if there is no price difference).
• Providing the ethical policy of an investment firm is not sufficient. We require evidence of the institutition’s own policy and commitment to ethical investment.

Evidence required:

• Ethical Investment policy document
• Weblink to publicly-available policy or (if not on the web) signed statement from responsible party confirming that the policy is publicly-available and contact details of the responsible party.

4. b) Is the ethical investment policy reported on annually?

See 4c for points

Clarifications:

• No points for failure to include minutes of reports or other proof describing how the policy is reported on.

Evidence required:

• Web link to evidence of the reporting or uploaded documents eg. minutes from a finance committee in which the policy was reported on since 1 April 2011
• If the policy is new, provide a short, signed statement from responsible party confirming the intended reporting structure and contact details of the responsible party.

4 c) Are there ongoing opportunities for staff, students and other stakeholders to engage with the ethical investment policy?

1 Point for 4b and/or 4c

Clarifications:

• No points for failure to include minutes of reports or other proof describing how stakeholders engage with the policy.
• Points are not awarded for simply making the ethical investment policy publicly-available, we also require evidence that an institution provided ongoing opportunities for staff, students and other stakeholders to engage with it.

Evidence required:

• Signed statement from staff AND student representatives that such opportunities exist (eg. student union executive)

4 d) Has your university taken investment, divestment action, engaged with companies as a shareholder or switched banking providers on ethical grounds since 1 April 2012?

1 Point

Clarifications:

• No points for failure to include minutes of meetings highlighting the action taken or other relevant proof of action.
• No points for general statements from investment managers committing to screen investments for ethical considerations. We also require actual evidence of the screening procedure and any outcomes in terms of determining investment, divestment or a change in banking or investment provision.
• Investing in spin off companies alone is not accepted as evidence of ethical investment action.
• ‘Shareholder engagement’ is a specific approach to ethical invesment. Points will not be awarded unless evidence shows engagement goes beyond simply raising ethical concerns without sustained or subsequent engagement or shareholder action.*

People & Planet commits to keep all evidence submitted confidential. Irrelevant or sensitive areas of the evidence submitted may be blanked out.

Evidence required:

• Upload evidence that such action has been taken e.g. minutes from University Council in which the investment, divestment or change of banking provider was discussed.

4e) Does your institution’s ethical investment policy make explicit reference to, and/or commitments to, excluding investments in the fossil fuel industry?

NB: this is a non-scoring, optional question for 2013

Evidence required:

• Weblink to the policy highlighting the reference to fossil fuel industry investments.

Next:Carbon Management

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